Deschutes Delays East Coast Expansion Again

Bend, Oregon based Deschutes Brewing which in 2016 committed to opening an East Coast brewery in Roanoke, Virginia has told a local paper that its plans to break ground in 2019 are on hold again, leading some to speculate that it may never happen…

Here’s the deal….

It’s possible that craft beer’s slowing momentum, which grew only 5% in 2017 may have put a stake in both Roanoke Virginia’s and Deschutes Brewing’s dream of second brewery on the East Coast…

And although the brewery isn’t officially bailing on the project as yet…We expect that they eventually will.

Responding to an inquiry Deschutes President Michael Lalonde told the Roanoke Times that work would not begin next year as had been planned…

“We continue to watch trends in the craft beer market for the right time to build a facility that is high quality and economically sustainable. We don’t foresee breaking ground in 2019 as originally planned, but we will meet a commitment next spring to let the city of Roanoke know our updated plans.”

Earlier this year Roanoke rescinded an agreement that would have given Deschutes Brewing (which had been actively courted by many East Coast cities) free land for its expansion and provided $4.7 million in state and local incentives.

But no matter those incentives, Deschutes who experienced a single-digit dip in its overall sales for the first time ever in 2017, opted to step away from those enticements.

Instead the brewery simply brought the 49-acre parcel outright in June, a $3.2 million sign of good faith and an indication of its commitment to eventually build a brewery in Roanoke.

But according to the Roanoke Times that June agreement came with a new timeline for action…

“{Deschutes} must submit a revised proposal to the city by March 31, submit proposed design plans and drawings for the brewery by Aug. 31, 2020, and commence construction by June 30, 2021, or the city can buy the land back for the full price Deschutes paid for it.”

So Deschutes’ plans for a $95 million facility that might employ up to 108 people are on hold again and unless the craft beer biz starts showing the kind of double-digit it did in the past …we expect that those plans will remain permanently on hold.